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ONGC Reveals Major Expansion Plans
 

The State-owned Oil and Natural Gas Corporation Limited (ONGC) announced plans to create a mammoth 45.5 million tons (mt) refining capacity at a cost of USD 12.5 billion that will spur it closer to its vision of being a global player by 2009-10. The new Special Economic Zone (SEZ) at Mangalore will see USD 6 billion of this investment. In addition the Mangalore facility will see another USD 1.7 billion to upgrade its 9.69 mt ton capacity to 15 mt. 

ONGC plans to invest another USD 2.02 billion in two 7.5mt refineries in Kakinada, Andhra Pradesh and Barmer, Rajasthan. It will spend another USD 1.7 billion to upgrade existing facilities and kick off three other private-public partnership refineries.

The company has already invested USD 8.988 billion in exploration and production in the last five years and this additional investment will propel it to be a global player in both upstream and downstream segments.
 

The company earned a net profit of USD 3.1 billion last years compared to USD 2.91 billion the previous year. These results are despite paying the highest ever subsidy of USD 2.6 billion when the Government, compelled by its communist allies, forced the oil companies to absorb higher oil prices to keep the retail prices artificially lower. Although the government tried to keep the prices lower, most of the money went to fund the rich and the country essentially lost money by denying one of the few profit-making state-owned company a better performance and expansion. The subsidy the previous year was USD 922 million.